World Environment Day: A make or break moment

Financial system decisions now pivotal to ending fossil fuel expansion in the world’s largest tropical rainforests

• Recent reports spotlight plans for fossil fuel expansion in some of the world’s most important ecosystems, and follow financial flows from major banks
• Banks, financial institutions, and their regulatory bodies have a key role to play in reducing threats to critical ecosystems and Indigenous and local communities, and reducing their own liabilities
• Oil and gas expansion serves as a wedge for other kinds of ecosystem degrading industries such as mining, logging, and agriculture to move into formerly high-integrity and primary forest areas that support millions of livelihoods

(World Environment Day, June 5th, 2023) — With the world hurtling towards the breaking point of the 1.5°C climate warming threshold by 2027, the urgent need to protect our fragile ecosystems has reached a critical juncture. In the two largest tropical rainforests in the world, fossil fuel expansion is a rapidly accelerating existential threat to global climate stability and biodiversity, and to tens of millions of Indigenous people and other local community members who live inside areas slated for oil and gas exploration and development.

In the Congo Basin, home to the world’s second largest rainforest, country officials have been on a global roadshow in Europe trying to entice interest from oil companies in new developments in connection with the DRC’s massive oil and gas block auctions. Several companies have already expressed interest in the coastal oil blocks (that overlap with Mangrove National Park) and selected gas blocks have reportedly already been awarded in the East. The continued development of the EACOP pipeline will make existing blocks more viable in the Eastern Congo as well as Virunga National Park.

Similarly, Amazonia has reached a climate tipping point  — yet urgent oil expansion threats remain. The Peruvian Congress is now proposing to place 31 oil blocks over 435 indigenous communities, eliminating 25 uncontacted peoples reserves. In Ecuador, a temporary moratorium on oil expansion is set to expire later this year and a range of key areas are at-risk including 3 million hectares (8 million acres) of intact rainforest and the territories of seven Indigenous nationalities. The Bolivian government has proposed to intensify hydrocarbon exploration during 2023, by approving the exploration and exploitation of 11 oil and gas projects located mainly in the Amazonia. And, in Brazil, a far-right Congress is proposing to gut the powers of both the ministries of the environment and Indigenous peoples — which will likely lead to continued forest degradation and further threaten the demarcation of Indigenous Territories.

The relentless growth of fossil fuel exploration in ecosystems that are critical carbon sinks and reservoirs of biodiversity not only imperils global climate stability, but also poses a grave threat to biodiversity and the livelihoods of millions of Indigenous peoples and local communities.

“Fossil fuels are a dead end — for our planet, for humanity, and yes, for economies.” said Secretary-General António Guterres at the launch of the last IPCC report. ”Oil and gas giants — and their underwriters — are also on notice.”

The International Energy Agency (IEA) has stated that in order to limit global warming to within the threshold of 1.5°C, no further fossil fuel expansion must take place. However, with current forecasts, in 2030, governments’ production plans and projections would lead to around 240% more coal, 57% more oil, and 71% more gas than would be consistent with limiting global warming to 1.5°C.

The lending practices of banks and financial institutions are critical factors that will determine whether oil and gas expansion happens in these vital forest basins. Several recent reports underscore the global need to end financing for all oil and gas expansion – especially in these and other critical forest basins and ecosystems.

• Banking on Climate Chaos: Fossil Fuel Finance Report 2023 (includes maps and financial analysis from Stand.earth on the Amazon and BankTrack and Earth Insight)
• Crisis Point: Oil and Gas Expansion Threats to Amazon and Congo Basin Tropical Forests and Communities
• Congo in the Crosshairs: New Oil and Gas Expansion Threats to Climate, Forests, and Communities

Key Background

• Amazonia Against the Clock: a Regional Assessment on Where and How to Protect 80% by 2025
• A roadmap to implement Target 3 of the Global Biodiversity Framework: Indigenous and traditional territories to save the planet
• Linked Fates: How California’s Oil Imports Affect the Future of the Amazon Rainforest
• European Banks Financing Trade of Amazon Oil to the U.S.
• Roads to Ruin: The emerging impacts of infrastructure development in Congo basin forests

Key Facts

Amazonia

• An estimated 65 million hectares of undisturbed tropical forest (an area nearly twice the size of Poland) now overlap with existing or planned oil and gas blocks in the Amazon Basin.
• Over 500 distinct Indigenous nationalities call the Amazon Basin home. More than 25 million hectares of Indigenous Territories are now in oil and gas blocks.
• More than 20% of populated places (over 1,800 villages, towns, etc.) in Indigenous Territories are under a current production or designated exploration oil and gas block.
• Over 12 million people living in more than 10,000 villages, towns, etc. — or more than 20% of populated places in Amazonia — are now in oil and gas blocks.

Africa and Congo

• On a continental scale in Africa, exploration blocks are nearly four times the current area in production — representing a significant potential increase for oil and gas expansion.
• Oil and gas exploration blocks overlap more than 30% of undisturbed tropical forests in Africa, of which 90% are in the Congo Basin.
• More than 70 million hectares (an area nearly twice the size of Germany) now overlap with oil and gas blocks in the Congo Basin.
• Over 150 distinct ethnic groups call the Congo Basin home and over 32 million people, or more than 20% of populated places in Congo Basin countries, are now in oil and gas blocks.

Key Solutions for Banks and Decision-Makers

Oil and gas drilling is a gateway to deforestation, both of which are massive drivers of climate warming and chaos. New policies and financial mechanisms are critical to stopping oil and gas expansion in areas that are critical to global climate stability. Solutions include:

• Commitments from banks and financial institutions to stop financing destructive oil and gas expansion – starting with critical forest basins and ecosystems, for example through platforms like Exit Amazon Oil and Gas.
• Conditioned debt forgiveness as a strategy to leverage tens of billions in debt repayments as a mechanism to advance protections for some of the world’s most intact and vulnerable ecosystems
• A moratorium on all industrial activity in primary forests until 2050 to safeguard critical ecosystems while allowing time and space to develop appropriate plans and financing.
• Expansion of global Indigenous peoples and other local communities’ land tenure, access and resource rights, direct funding for co-management, and the requirement of Free, Prior, and Informed Consent (FPIC).
• The Amazonia for Life: 80% by 2025 Declaration from Indigenous federations across the Amazon calling for expanding indigenous rights, territories, and funding, conditioned debt forgiveness, clean financing, and supply chains, ending extractive activities in primary and priority forests, and restoration.
• Increased country-level commitments to the principles of the Beyond Oil and Gas Alliance.
• New frameworks for financing bold climate and biodiversity action, including the 10-Point Plan for Financing Biodiversity.
• Widespread commitments to the Fossil Fuel Non-Proliferation Treaty.
• Unlocking the vast potential in renewables and scaling up direct support to forest communities and other frontline forest defenders.